It is a scenario that plays out for many people each day. They go by the ATM to withdraw money and their money is gone. They try to pay bills, but their checking account is empty. Payday comes and a large amount is missing from their paycheck.
Arizona allows wage garnishments for certain debts. A creditor can file a debt collection lawsuit to obtain a monetary judgment against an individual. After obtaining the judgment, the creditor applies to the court for a wage garnishment order. Some creditors may garnish wages without a court order. Debts that may be garnished without a court order include, but are not limited to, domestic support payments, taxes, government debts, and student loans.
If you receive a wage garnishment notice, do not ignore the notice. Do not ignore debt collection lawsuits or other forms of debt collection. If you ignore these matters, a substantial portion of your wages may be garnished. Instead, contact our Glendale wage garnishments attorney to discuss your options for stopping wage garnishments in Arizona.
How Much of My Pay Can A Creditor Take Under Wage Garnishment?
A creditor may take the lesser of 30 times the federal minimum wage rate or 25 percent of your net wages to repay a debt.
Income includes salaries, wages, bonuses, commissions, rental income, and self-employment income. Some income is exempt from wage garnishments, including most retirement income, pensions, workers’ compensation benefits, and Social Security benefits.
Stopping Wage Garnishments in Glendale
Our Glendale wage garnishments attorney can help you explore options for stopping wage garnishments. In some cases, a person may qualify to have the wage garnishments stopped because of a hardship. However, that does not address the underlying debt, and the creditor may request a wage garnishment again if your financial situation changes.
Filing a bankruptcy case stops wage garnishments. If the debt that caused the wage garnishment is dischargeable, bankruptcy stops the wage garnishment permanently.
For example, if the wage garnishment is for a credit card debt or medical bill that is eligible for a discharge, the creditor cannot resume garnishing your wages once you receive your Chapter 7 bankruptcy discharge. The debt is discharged, and the creditor must cease all collection efforts. The same applies to a Chapter 13 case. Once you complete your Chapter 13 repayment plan, the debt is discharged and goes away.
However, if a debt is not dischargeable in bankruptcy, you may want to file a Chapter 13 instead of a Chapter 7 case. In a Chapter 13 bankruptcy case, you can spread out the debt over a five-year plan to pay the debt in full. Once you complete the Chapter 13 plan, the debt is resolved, and you do not need to worry about the creditor garnishing your wages. Examples of debts that are not dischargeable in bankruptcy include most tax debts, child support, alimony, restitution, and most debts owed to a government entity or agency.
Student loans are also not dischargeable in bankruptcy. The Chapter 13 case stops the wage garnishment, but the creditor can resume garnishing your wages once you exit Chapter 13. Our Glendale wage garnishment lawyers can help you explore additional options to get rid of student loans or make student loans more affordable after bankruptcy.